Livin’ For the City

Chicago’s North Side, though, is not the only segment of the city to see rising interest among homebuyers. The Loop, formerly the prime business district for the city, has in the last 10 years become a viable residential marketplace, and as James Hanson, the principal of Mesa Development, explains, such a change represents a formidable evolution of the downtown marketplace.

“If you look 10 years ago, there was really no residential alternative in the Loop,” Hanson says. “The residential options downtown were limited to the Gold Coast and North Michigan Avenue. But in the last 10 years, you’ve seen the South Loop, the West Loop and the Millennium Park market. You’ve seen the entire downtown develop as a residential, retail, walkable, 24/7 neighborhood.”

The reasons for that development, Hanson explains, are nearly identical to those cited by Siciliano for Chicago’s North Side – a strong desire among buyers for a closer, walkable proximity to culture, restaurants, theaters and especially places of work. What’s different, though, are the types of consumers returning to the Loop – Baby Boomers.

“[Baby Boomers] really want to live in urban areas,” Hanson says. “Many of them were born in the city, but when they got to an age where they were thinking of having their own families or starting families, they moved out to the suburbs to raise their children. Those folks now, the empty nesters, are saying, ‘We don’t want to be in the suburbs anymore. We want to move back into the city for the type of living, the type of density and urban lifestyle we grew up with.”

Those consumers, Hanson says, have been the primary engine for Mesa Development’s projects, especially its hugely successful The Legacy at Millennium Park, a mixed-use, 72-story luxury condominium that, in addition to winning the Vision Award from the Urban Land Institute’s Chicago District Council in 2012, was the primary reason behind Mesa’s 2012 Agents’ Choice award from Chicago Agent readers for “Developer of the Year, City.”

And the Loop residential market has certainly been putting up some smashing numbers in recent years. Not only are sale prices up 36 percent since 2000 according to the aforementioned Institute of Housing Studies report (making it the fastest growing residential neighborhood in all of Chicago), but the downtown population grew an astounding 114 percent from 1990 to 2010, while the regions within two miles of City Hall added nearly 50,000 residents in the same time span, a 36.2 percent increase that is greater than any other American city, including New York City. And according to the Civic Federation, a nonpartisan research center in Chicago, property values in Chicago rose 24.8 percent in the past decade, compared to 5.6 percent for suburban Cook County; similar data from Trulia found that home prices in the city of Chicago have been outpacing the surrounding suburbs, growing 1.1 percentage points more thus far in 2013.

But again, all of those trends and numbers have been part of a very recent phenomenon in urban living, and Hanson says that if any one thing can be credited for spurring the downtown residential marketplace, it’s the city’s development of Millennium Park.

“Without Millennium Park, which becomes the front yard, the playground of the downtown area, I don’t think we’d see the residential development in the Loop that you see in The Legacy at Millennium Park, which we developed; the Heritage at Millennium Park, which we also developed; 340 East Randolph and Aqua – all of these buildings, which are going up south of the river, are really playing off Millennium Park,” Hanson says. “That is an example of government doing something that has had such dramatic ripple effects for the positive across the rest of the city. It’s just been dramatic, the transformational impact of Millennium Park on the rest of the city.”

In addition, the completion of Millennium Park coincided with a long-gestating change in how Americans view urbanism, a trend that Hanson sees taking place right here in Chicago.

“I absolutely think [we’re seeing a return to urbanism],” Hanson says, “because not only are we seeing a lifestyle decision, in terms of convenience of your proximity to your work and better culture, but it’s an environmentally sustainable lifestyle as well.”

Richard Hanson, Mesa Development’s principal and founder, says that economics and environmentalism play a big role in consumer’s decisions, as do the same long commutes that Siciliano’s clients try to avoid.

“Economics and time saving [are also important],” he explains. “People just don’t want to spend an hour, hour and a half on the Kennedy each way, and spend $4-plus a gallon for gasoline. We actually tell people when we sell that ‘We can give you two hours of your life back.’”

Finally, another influential factor, James Hanson says, has been the changing fortunes of many suburban homeowners. Now that Chicagoland real estate is on a firm path to recovery (according to the Mainstreet Organization of Realtors, single-family detached home sales in suburban Chicago were up 29.1 percent year-over-year in May), empty nesters have accrued the necessary equity to sell their suburban homes and return to the city.

“There’s been a huge segment of the population that has been locked in place for the last four to five years who are itching to make a move, and are now feeling confident and have the ability to make that move,” he says.

Click here for more information on how the Loop has thrived in the past decade!